Daniel Greenwald, John Krainer, Pascal Paul, 29 July 2021

Aggregate US bank lending to firms tends to expand following adverse macroeconomic shocks, such as the outbreak of COVID-19 or a monetary policy tightening. Based on detailed loan-level supervisory data, this column shows that these responses are almost entirely explained by large firms drawing on their bank credit lines. However, funding stability for large firms may imply that smaller firms face tighter borrowing conditions. The authors show that such a crowding out effect was at play during the COVID-19 crisis and explore the implications of such spillovers within a structural model.

Jose Maria Barrero, Nicholas Bloom, Steven Davis, 27 July 2021

Employers in the US are grappling with whether and how to bring employees back to the office or other place of work. Using survey-based evidence, this column finds that four in ten Americans who currently work from home at least one day a week would seek another job if employers require a full return to business premises, and most workers would look favourably on a new job that offers the same pay with the option to work from home two or three days a week. High rates of quits and job openings in recent months appear to partly reflect a re-sorting of workers based on the scope for remote working.  

Dan Zeltzer, Liran Einav, Joseph Rashba, Ran Balicer, 21 July 2021

The use of telemedicine rose sharply under the COVID-19 pandemic, and in the coming years we are likely to see more healthcare delivery that mixes in-person with remote care. But concerns remain over whether remote care might reduce care quality or increase costs. This column examines the effect of increased access to telemedicine on care cost and outcomes using data from Israel around the country’s first lockdown in March and April 2020. Access to telemedicine results in a slight increase in primary care use and no significant increase in overall costs. There is no evidence for decreased accuracy or increased likelihood of adverse events.

Lin Ma, Gil Shapira, Damien de Walque, Quy-Toan Do, Jed Friedman, Andrei Levchenko, 19 July 2021

There has been ongoing debate over what type of lockdowns are warranted to counter Covid-19 and whether the benefits justify the accompanying economic contractions. This column uses a macro-susceptible-infected-recovered model to show that the impact of economic contractions on child mortality in poorer countries combined with their younger demographic composition, as well as the greater community-related transmission and lower healthcare capacity in these countries, mean that under certain circumstances, lockdowns could actually increase overall (COVID-19 plus non-COVID-19) mortality for the lowest-income countries.

João Ayres, Pablo Andrés Neumeyer, Andrew Powell, 19 July 2021

The ‘right’ monetary policy response to COVID-19 has depended on any number of factors for central banks across the world. This column argues that some central banks in Latin American and Caribbean went beyond accommodating the increased demand for liquidity, inducing monetary injections that then returned through excess bank reserves and sterilisation liabilities for those central banks that fixed an interest rate, and through sales of international reserves for those that favoured stable exchange rates. The authors also outline some of the risks confronting central banks for the months ahead.

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